Airlines — and those of us flying with them — have been through a tumultuous summer travel season.
LikeFolio’s mention tracker logged thousands of mentions from consumers expressing concerns regarding flight cancellations, rising costs, and poor customer experience to boot.
You can see a stock performance breakdown for four of the major airlines we track below: Delta Air Lines (DAL), American Airlines (AAL), Southwest Airlines (LUV), and United Airlines (UAL).
All are trading lower year-to-date.
BUT — LikeFolio data suggests that airlines may have already navigated the worst of the macro pressure storm.
Here are four “updrafts” — bullish indicators — that we’re watching.
Updraft No. 1: Travel Demand Remains Strong
Sector analysis for all companies in travel, airlines, and leisure suggests that consumers have continued to prioritize experience spend.
Across the board, mentions from consumers booking or taking a flight with any airline on our coverage list remain 16% higher year-over-year (YoY).
Updraft No. 2: Consumer Airfare Price Concerns Are Falling
The downstream effects of surging oil prices haven’t been limited to consumers paying more at the pump.
Thanks in part to a massive increase in the price of fuel, the cost to fly domestically increased nearly 50% from January through June 2022, and consumers took notice.
Mentions of flights being expensive or costing too much reached all-time-high levels earlier this summer.
Now those mentions are beginning to come back down. Domestic airfare is expected to drop 25% through August from its peak earlier this summer.
Qualitative analysis confirms that consumers are finding lower prices.
This drop in pricing could sustain travel demand into holiday booking… an area we will certainly be monitoring.
Updraft No. 3: Most Major Airlines Are Recording Improved Customer Experiences
Three out of four of the major airlines analyzed have recorded consumer happiness improvements in the past month, a promising sign that they’re navigating logistical hurdles.
You can see improvements in airline cancellations mentions in the same period on the chart below.
While cancellation mentions remain +46% higher YoY, they have tempered dramatically from June highs.
This certainly helps from a customer experience perspective. And airlines are making moves to repair the loss of face suffered during the height of the cancellation problem.
Updraft No. 4: The Price of Jet Fuel Is Starting to Cool
Lastly, the macro pressure driving up costs for consumers and cutting into company profits, rising jet fuel costs, has started to show SOME signs of relief.
Fuel prices have steadily declined from the highs seen earlier this year.
This trend lines up nicely with projections of declining airfare prices in the coming months.
Bottom line: Macro trends causing chaos in airlines remain elevated on a YoY basis but appear to have peaked.
We’ll be monitoring this segment closely to understand when long-term opportunity presents… and which players are likely to be long-term winners.